Cotton Industry Vision 2029
Final Report
March 2010
Emergent Futures Pty Ltd
Level 27,
101 Collins St,
Melbourne, Victoria,
Australia 3000
Ph: 61 (0) 3 9018 7917
Fax: 61 (0) 3 9012 3580
www.emergentfutures.com
Key Contact:
Sandy Teagle
Mobile 0408 002 909
sandy@emergentfutures.com
Emergent Futures – Cotton Industry Vision 2029, Final Report
1
Contents
1.
Executive Summary..................................................................................................... 3
2.
Background ................................................................................................................. 5
2.1
Project Objectives ....................................................................................................... 5
2.2
Project Outcomes and Benefits.................................................................................... 5
2.3
Scope.......................................................................................................................... 5
2.4
Approach..................................................................................................................... 6
2.5
Participants ................................................................................................................. 6
3.
Current Vision, Future Drivers ..................................................................................... 7
3.1
Current Vision ............................................................................................................. 7
3.2
Future Drivers ............................................................................................................. 8
4.
Scenarios .................................................................................................................. 10
4.1
Draft Scenarios ......................................................................................................... 10
4.2
Final Scenarios ......................................................................................................... 12
5.
Preferred Future and Vision ....................................................................................... 13
5.1
Preferred Future ........................................................................................................ 13
5.2
Vision Statement ....................................................................................................... 15
6.
Next Steps ................................................................................................................ 17
7.
Recommendations .................................................................................................... 17
8.
Appendices ............................................................................................................... 19
8.1
List of Project Reports ............................................................................................... 19
8.2
Stakeholder Opinion Survey 1 – Summary................................................................. 19
8.3
Scenarios .................................................................................................................. 22
8.4
Preferred Future ........................................................................................................ 29
8.5
Stakeholder Opinion Survey 2 – Summary................................................................. 33
Emergent Futures – Cotton Industry Vision 2029, Final Report
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1. Executive Summary
In 2009 Australian cotton industry leaders recognised that the industry needed a clearer shared
vision and saw the potential for industry performance, organisational collaboration and capacity
to be enhanced through development of a shared vision. The intent of a shared vision was to
help inform organisations and sectors to enable alignment of thinking about the future.
The Cotton Research and Development Corporation (CRDC) engaged strategy and foresight
consulting group, Emergent Futures, in August 2009 to facilitate a project, Cotton Industry
Vision 2029, for the development of a shared industry vision. The project commenced in
September 2009 and concluded in March 2010.
The Vision 2029 project was a collaboration between CRDC, Cotton Australia and the
Australian Cotton Industry Council (ACIC), with representatives from these organisations
forming a Reference Group for the project. The project scope covered the whole of the
Australian cotton industry from input suppliers through to marketers.
In order to develop a shared vision, a scenario based foresight approach was taken to help the
industry first explore the range of possible futures it may face before identifying a preferred
future for the industry. A series of workshops, stakeholder surveys and scanning activities were
undertaken to identify trends, assumptions and driving forces that would influence the industry
future.
Scenarios identified the range of possible futures that the Australian cotton industry might face
from a booming resurgence to decline and collapse based on critical challenges and
uncertainties identified at the beginning of the project. Four separate scenarios were
developed: Boom, Bust, Food Replaces Fibre, and Present Day Projection. From these
scenarios a draft Preferred Future and vision for the Australian cotton industry was developed:
Below is a summary of the preferred industry future. This represents a vision of how the
industry might look in 20 years time (2029) having overcome challenges from its present
situation.
Vision:
“Australian cotton, carefully grown, naturally world’s best”
By 2029 the Australian cotton industry will be:
•
Differentiated - world leading supplier of an elite quality cotton that is highly sought in
premium market segments
•
Responsible - producer and supplier of the most environmentally and socially
responsible cotton on the globe
•
Tough - resilient and equipped for future challenges
•
Successful - exciting new levels of performance that transform productivity and
profitability of every sector of the industry
•
Respected - an industry recognised and valued by the wider community for its
contribution to fibre and food needs of the world
Emergent Futures – Cotton Industry Vision 2029, Final Report
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•
Capable - an industry that retains, attracts and develops highly capable people
This vision is to be owned by the whole of industry. Further activities are planned to engage
and consult industry more broadly to seek agreement on the final vision and work on strategies
for achieving the vision.
ACIC is to be responsible for managing, monitoring and reporting on progress of the vision and
strategy. Options for strategy development and monitoring scenarios and emerging issues are
to be considered by ACIC in 2010.
Early responses to the vision so far appear to be very positive. Organisations have indicated
they are already starting to use the vision and are looking towards integrating this further as the
focus and direction for the future. This signifies an excellent start to adoption and integration of
the vision which is the ultimate milestone for success of this initiative.
28 March 2010
Enquires – for further information relating to the Cotton Industry Vision 2029 initiative please
contact Bruce Finney, CRDC.
Emergent Futures – Cotton Industry Vision 2029, Final Report
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2. Background
In 2009 cotton industry leaders recognised that the industry needed a clearer shared vision and
collective approach to planning and saw the potential for industry performance, organisational
collaboration and capacity to be enhanced through development of a shared vision. A collective
vision would provide a longer term focus for activities and help harness effort for best effect.
CRDC, in collaboration with Cotton Australia and ACIC, engaged strategy and foresight
consulting group, Emergent Futures, in August 2009 to facilitate a project for the development
of a shared industry vision.
2.1 Project Objectives
The agreed objective for the project was:
•
“To develop a shared vision that inspires and unifies the Australian cotton industry”.
The intent of having a shared vision is to help inform organisations and sectors to enable
alignment rather than telling them what to do.
To begin the process and clarify the scope of the project a focusing question was selected:
•
“What is the future of the Australian cotton industry in 20 years time?”
The 20-year timeframe was chosen in order to stretch thinking beyond the short-medium term
and ensure a longer-term strategic focus.
2.2 Project Outcomes and Benefits
The agreed desired outcomes and benefits were:
Outcomes
A considered and shared view of a preferred future
A shared vision to help guide future actions and plans for the Australian cotton industry
Benefits
Potential for enhanced industry performance, organisational collaboration and capacity
Greater awareness of possible future challenges and opportunities for the cotton industry
Enhanced capabilities in thinking about the future for stakeholders involved in the project
2.3 Scope
The intent was for the vision to be for the whole of the Australian cotton industry. The following
definition was developed to capture this:
“The Australian cotton industry is defined by the strength of its connections through input and
service providers to the production, ginning, classing and marketing of Australian cotton to
overseas customers.”
Below is a list of all the relevant sectors:
•
Cotton planting seed distributors
•
Cotton agricultural
•
Emergent Futures – Cotton Industry Vision 2029, Final Report
Cotton ginners
5
products/agrichemicals resellers
•
Cotton classers
•
Biotechnology trait providers
•
Cotton merchants
•
Cotton consultants and service
providers
•
Cotton warehouses
•
Cotton spinners
•
Cotton growers
•
Industry representative organisations
•
Cotton contractors
•
Cotton R&D providers
2.4 Approach
In order to develop a sound vision for the cotton industry it is first essential to explore
assumptions underpinning existing views and the range of possible futures that the industry
may face. This enables the industry to develop its vision having taken into account existing
blindspots, potential changes, opportunities and threats in the environment. The resulting vision
will be more robust, compelling and realistic and will help position the industry to achieve its
preferred state more readily given the greater awareness of and preparedness for the
challenges it may face.
To achieve this, a foresight approach was taken to examine the possible futures for the
industry. Foresight is about improving how we think about the future and uncertainty to enable
better strategy and decision making. Scenarios are a common foresight tool used to explore
possible futures and these were used in the project to examine the possible future
environments and vision for the industry.
The key elements the approach and project activities are captured in the following diagram:
Project
Scoping
Clarifying
scope:
– Establish
Project
Team
– Define
focusing
question
– Finalise
project
plan
– Establish
Reference
Group
Current
Vision,
Future
Drivers
Identify
present
visions,
assumption
s and future
drivers:
–
Interviews,
– Surveys,
– Literature
review
Exploring
the Future
via
Scenarios
Scenario
workshop:
– Review
results of
interviews,
survey,
scanning
– Determine
key drivers
– Draft four
scenarios
Write up and
review of
scenarios
Preferred
Scenario
Shared
Vision
Wrapping
Up
Preferred Scenario &
Visioning Workshop:
– Identify scenario
consequences for
industry
– Identify preferred
scenario
– Draft shared vision
Meeting to
finalise
vision,
including
short
strategy
developm
ent
process
Consultation with
stakeholders on
preferred scenario
and draft vision
Prepare
final
report
September 2009
March 2010
2.5 Participants
The project consultant, Emergent Futures, worked with input and advice from a small Project
Team consisting of representatives from the three organisations collaborating on the project. A
Emergent Futures – Cotton Industry Vision 2029, Final Report
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larger Reference Group was utilised for major activities including three workshops. The ACIC
membership formed the basis of the Reference Group.
Project Team
Reference Group (actual participants)
Mike Logan, CRDC
Bruce Finney, CRDC
Joanne Grainger, Cotton Australia
Adam Kay, Cotton Australia
Rob Dugdale, ACIC
Peter Graham, ACIC
Sandy Teagle, Emergent Futures
Adam Kay, Joanne Grainger, Phil Armytage, Scott
Campbell, Mike Logan, Bruce Finney, Phil Ryan,
John Robinson, Brad Pfeffer, Rob Dugdale, Peter
Graham, Greg Parle, Jeff Ballantine, Peter Weal,
Dave Anthony, Robert Baird.
3. Current Vision, Future Drivers
The first step in the project was to get a perspective on the current state of the industry, existing
visions and assumptions about the future, and to explore drivers of change that may influence
the future of the industry. A range of activities were undertaken for this purpose:
•
phone interviews with 14 industry stakeholders and external people
•
an online opinion survey open to all industry stakeholders, distributed directly via email
and by notification on industry websites
•
a short literature review/environmental scan
Detailed results from these activities are available in separate reports which are listed in the
Appendices.
The results of these activities were presented at the first workshop of the Reference Group on
29 October 2009. The purpose of this workshop was to:
•
Explore existing industry visions and alternative industry futures
•
Identify main assumptions and drivers of the future
•
Identify possible scenarios
3.1 Current Vision
Current State
In terms of the current state of the industry, the survey and interview data indicated that
respondents largely view the industry as being significantly challenged by a variety of factors, in
particular water availability. Drought is also top of mind. While some responses were less
optimistic (in dire straits, on its knees, struggling, declining, stagnant) many indicate a cautious
optimism that the industry is adapting well, is forward looking, remains positive, resilient and
capable of quickly regaining ground when conditions improve. “Things can only get better”
sums it up.
Comments were made that the industry is in a relatively mature stage with rapid growth behind
it, major rationalisation is occurring/has occurred, leadership is becoming more conservative,
and growers don’t necessarily see themselves as cotton growers any more, rather they are
‘water users’ or ‘irrigators’ and will not be the “parochial ‘cotton grower’ of the past”.
Future Vision
Emergent Futures – Cotton Industry Vision 2029, Final Report
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The survey and interview data indicated that views were relatively conservative – there were no
visions for radical change or transformation of the industry, nor many thoughts that the industry
would cease to exist (assuming that it would rain again one day). The need for continuous
improvement across the supply chain was recognised to try and keep up with the challenges
faced by industry.
Many saw the industry continuing to have a place as a provider of high quality cotton. For some
this was a smaller niche. Some thought there would be a greater shift towards integrated
systems with cotton as part of the mix, more dryland cotton, and cotton production in new
geographic areas. There were quite a few references to potential demise of the traditional
‘cotton grower’ and a shift to being ‘irrigators’ reflecting the greater integration of cotton within
cropping systems.
People issues also featured including the need for ongoing programs for development of young
leaders, declining scientific population, competition for labour, and potential decline of rural
communities. Preferred industry futures were often described in terms of the attributes of its
people – vibrant, enthusiastic, cohesive, responsive, dynamic, innovative, collaborative, exciting
and attractive.
Opinions on key elements of the future were:
•
Size – majority expect no growth
•
Australian competitiveness – majority expect no increase
•
Cotton competitiveness – many uncertain, very few expect decline
•
Likely future – majority see a future (vs no future) but what this is varies
•
Desired future – similar to likely future, some differences eg. recognition & passion
3.2 Future Drivers
The most important changes indicated in the opinion survey were:
•
Water constraints/availability
•
Climate change and political response
•
Water reforms & policy
•
Attitudes/perceptions to farming (political and community)
•
New technology developments (including biotech)
•
Water use efficiency
•
Commodity pricing, cotton prices
Uncertainties and assumptions were both around similar issues and aligned with the most
important changes, while assumptions gave opposing views on issues in some cases eg. on
yield and competitiveness.
A wide range of competitive advantages, attributes and ideas were identified in the survey
and interview data with the most common being:
•
Premium/high quality
•
Environmental credentials/sustainable/ clean green/BMP
•
Increase yields
•
Value adding of cotton by-products (seed, oil, etc)
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The Reference Group identified the key drivers of the future based on the changes,
competitiveness assessment, assumptions and uncertainties from the survey, interview and
scanning data, plus issues they felt were missing from the data.
Key Drivers
Changes
• Global/competitive – food
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
vs fibre drives price
Water – quantity,
availability
Political outcomes
Society – public
perceptions and values
Environment, NR
Management – energy,
CPRS, carbon, BMP
Costs/profit
Producer
viability/profitability
Capturing our brand value
Regional security – food,
refugees, Australia’s
future
Marketing process –
Australian manufacture
Assumption that we need
dirt to grow cotton
Speed of adaptation
Alternative use of cotton
seed
People – labour, size of
growers
Traceability
More mechanization
Technology – varieties,
GM, production systems
Technology takers
Structural change –
decline in small towns,
increase in larger regional
towns
Less people – technology
replacing
Competitiveness
• Radical technology
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
change- ie. No more dirt
to grow cotton
Decreasing viability and
profitability
Yield, quality and prices
will decline
R&D funding
Regional security –
invasion
Resistance GM
Competitiveness of cotton
to other fibres, net return
per ML water
Not capturing brand value
Structural change
generalization
CPRS environment
Availability of water,
license security
Varietal development
speed
Traceability
Marketing and how we do
it – Australian
manufacturing Less
people due to technology
More mechanization
Alternative uses of cotton
fibre and seed
Less investment in
specific technology for
Australia
Uncertainties/Assumptions
• Food vs fibre
• New production areas
• Quality and productivity
gains sustained
• Industry/grower
profitability
• Product vs commodity
marketing
• New marketing approach
– domestic textile industry
• “Branding” – Aussie
OiOiOi cotton
• Less skilled people
• Preference for natural
fibre
• Production risk as other
countries get GM
• Man made fibres improve
• Textile innovation
synthetics/cotton
• Market exists for cotton
• Decrease in R&D - public
funded
• New technology – nano,
genetic, supply chain,
fabrication
• Government policy –
water, carbon
• Government subsidized
cotton - overseas
competition
• Less water and more
variable
From these key drivers a list of the most critical uncertainties was identified by mapping the key
drivers in terms of their level of potential impact (high/low) and level of uncertainty (high/low)
using Impact and Uncertainty Matrices. The list below represents the high impact/high
uncertainty factors with the four most critical uncertainties highlighted in italics.
Critical Uncertainties:
•
•
Food vs fibre
Product vs commodity marketing (future differentiation – quality, carbon footprint,
ethical production)
Emergent Futures – Cotton Industry Vision 2029, Final Report
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•
•
•
•
•
•
•
•
•
Water – quantity (high vs low) and variability (high vs low)
Dirt to grow cotton (biological vs engineered cotton)
Energy price (group agreed to assume increasing therefore more certain than
uncertain)
R&D funding (group agreed to assume declining public funding was relatively certain)
Regional security (pressure to grow food instead of fibre)
Yield, quality and price decline (status quo vs lost competitive advantage)
Radical technological change (assume ongoing technological advancement but maybe
a specific technology impacts, agreed this was similar to ‘dirt cotton’)
Reduced viability and profitability
Profitability (low vs high, dedicated cotton growers vs opportunism)
4. Scenarios
The four critical uncertainties identified were used by the Reference Group to construct draft
scenarios during the first workshop:
•
•
•
•
Food vs fibre
Product vs commodity marketing (future differentiation – quality, carbon footprint,
ethical production)
Water – quantity (high vs low) and variability (high vs low)
Dirt to grow cotton (biological vs engineered cotton)
4.1 Draft Scenarios
1. Combined food and water scenarios
Food Replaces Fibre
“Kiss of Death for Cotton”
60,000 ha cotton
Grain substitutes
Stricter control of water use
Low
Water
“Farmer Nirvana”
Double cropping – cotton plus
vegetables/grain
Smaller but not death of cotton
Infrastructure declines or diversifies
Risk = opportunity lost
Cotton price? (don’t know how this works
in this scenario)
Assume climate/environmental crisis in
China/other countries resulting in low
global production and need for increased
food imports
“Status Quo”
Continued drought
High cotton prices
Higher proportion of dryland
More opportunistic growers
Lowest cotton production (600,000
bales)
People leaving cotton
Overall decline of agriculture
Infrastructure deterioration
Positive innovation to produce more
with less
Lost glamour of industry
“Dream On/Euphoria”
High
Water
Positive innovative industry
Positive psychological status
Empowered, buoyant
“1990”
Larger, more acreage
Dedicated – same number of growers
growing more
Control of its own destiny
Higher profitability
Attractive to people and investment
Cotton towns booming
Concerns regarding cottons larger
Emergent Futures – Cotton Industry Vision 2029, Final Report
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Australia loses markets
Factor 10 efficiency – making it
count
Assume decreased cotton
production in China, Brazil, India at
expense of food (food security
policy)
footprint is normal, consistent
Assume decreased cotton production in
China, Brazil, India at expense of food
(food security policy)
Assume infrastructure available to
capitalize on this – will take 3+ years to
rebuild from current situation
Food Doesn’t Replace Fibre
2. Water variability scenarios
Low
Water
Variability
“Boom”
“Bust”
Reliable, predictable,
consistent
Confident to forward sell cotton
Confident to forward plan and
invest in industry (farming)
businesses, R&D
Willing to manage for up side
More stable labour market
Invest more in people
POSITIVE FARM MENTAL
HEALTH
Unreliable, unpredictable, inconsistent
Loss of skilled/semi-skilled labour
Loss of confidence to hedge on cotton
price
Cashflow difficulties – asset rich, cash poor
Consolidation of farming enterprises
Highly unattractive to investors
Change in business model – lease country,
contract gear, temporary/permanent water
trades
Effective use of labour/contractors
Undermines grower/industry confidence
Impacts on continuity of R&D and industry
capacity
Growers chase cashflow – look at other
crops
Industry becomes risk adverse
Impacts negatively on farm mental health
High
Water
Variability
3. Differentiation scenarios
“We’re Aussie, Wear Aussie”
Differentiated
1. Value proposition
Product - Point of difference
Need for a premium
2. Discerning, wealthy, higher
disposable incomes
China and India
Emerging countries
Mills brand owners
Retailers
CS Responsibilities
Traceability
4. Collaborative across the whole
industry
Brand owners could directly buy the
cotton, like wool
Merchants challenged
CSD varieties
5. Exciting, collaborative working
together
Feels like we have a future
In more control
Emergent Futures – Cotton Industry Vision 2029, Final Report
“Status Quo (Now)”
Consolidation of
international merchants
Multi National
Commodity
11
4. Dirtless cotton/ radical technology scenarios
“Man made comparable qualities
to cotton”
Dirtless
cotton –
radical
technology
shift
“Status Quo”
Status quo
Factories producing cotton
No gins, some niche growing
Food crops grown
Low wheat prices
Rural communities hammered
R&D shrunk considerably
More food production
No R&D
Micro-industry
Low
innovation
in man
made
fibres
4.2 Final Scenarios
The draft scenarios were developed further following review of material from the first workshop
and discussion with the Project Team. The scenarios were reviewed at a second workshop with
the Reference Group on 23 November with a final four scenarios selected:
•
•
•
•
Food Replaces Fibre – competition between food and fibre
Boom – water variability and availability
Bust – water variability and availability
Present Day – projection of current situation and assumptions
A snapshot of each scenario is provided below. Full versions including scenario narratives are
provided in the Appendices.
Food Replaces Fibre
Scenario snapshot
• Continued growth in population and
affluence, results in increased demand for
food and especially protein.
• Diminishing resources creates competition
between food and fibre for resources.
• Lack of coordinated global response to
food crisis increases scale of problem and
level of competition.
Critical uncertainties
Climate variability
Water availability
Competitiveness with food
Competitiveness with man made
Global competitiveness
Product differentiation
Cotton grower dedication
Cotton industry profitability
Medium
Medium
Low
Low
Reducing
Low
Low
Low
Critical uncertainties
Climate variability
Water availability
Competitiveness with food
Competitiveness with man made
Global competitiveness
Product differentiation
Cotton grower dedication
Cotton industry profitability
Low
High
High
High
Medium
High
High
High
Boom
Scenario snapshot
• Option A: The wettest of the Global Climate
Models emerges, resulting in increased
rainfall and runoff and improved water
reliability. Continued population growth
creates additional demand for increasing
supplies of food and fibre.
• Option B: The drier of the Global Climate
Models emerges, resulting in reduced
rainfall and runoff and lower, but more
Emergent Futures – Cotton Industry Vision 2029, Final Report
12
predictable, water availability. Coordinated
global response to food crisis results in
increased investment in ag R&D and
infrastructure.
Improved
efficiencies
overcome
water
availability
and
competition with food.
Bust
Scenario snapshot
• Climate change induced high variations in
rainfall: seasonal/ regional/ local.
• High variation in production in line with
rainfall variation.
• Fewer dedicated cotton growers as
production systems become more diverse
cropping systems to adapt to water
variability.
Critical uncertainties
Climate variability
Water availability
Competitiveness with food
Competitiveness with man made
Global competitiveness
Product differentiation
Cotton grower dedication
Cotton industry profitability
High
Low & High
Low
Low
Low
Low
Low
Low
• Decline
in production, quality and
reputation leads to critical mass tipping
point.
Present Day Projection
Scenario snapshot
• Disruptive changes in water availability as
a consequence of water reforms and
policies.
Critical uncertainties
Climate variability
Water availability
• Variations in water availability between
regions.
Competitiveness with food
• High competitiveness with food, retention Competitiveness with man made
of skilled people, but low profitability due to
increasing cost of production.
Global competitiveness
Product differentiation
Cotton grower dedication
Cotton industry profitability
High
Less
(varies
across
valleys)
High
Medium
Medium
Medium
Medium
Low
5. Preferred Future and Vision
Development of a Preferred Future and vision began at the second workshop with the
Reference Group on 23 November and was continued after this by members of the Project
Team. Consultation on the final version of the Preferred Future was undertaken via a second
stakeholder opinion survey and interviews in February 2010. A third and final workshop of the
Reference Group was held on 15 March 2010 to review results of the consultation and seek to
finalise the Preferred Future and vision statement.
5.1 Preferred Future
Elements of a Preferred Future and principles for the type of vision desired were identified by
the Reference Group.
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13
Preferred Future Themes
Common themes of preferred futures
• Innovative
• Water use efficiency
• Reflections on past and expectation of
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
going back there
Collaborative
Communication – internal and external
Leadership
Science based
People – attracting, growing, keeping
Profitable
Whole of industry approach –
inclusiveness
Worlds best
Premium product – quality and yield
Resilient and vibrant
Efficient
Sustainable
Dynamic
Accountable
Customer focus
Common themes of competitive advantages,
attributes or ideas that industry could
exploit
• Quality/premium
• Varieties – increased yields and quality
• BMP branding, sustainability practices
• Proximity to markets
• Value adding through blends with other
fibres
• Value adding to byproducts (eg. Seed)
• Carbon footprint and water efficiency vs
synthetics
• Onshore processing
• World leading R&D
• Innovative growers
• Unique value proposition – linked to
Australian lifestyle
• Contamination free
• Scale and efficiency and cohesiveness
• Niche market branding identifiable
The Preferred Future narrative and detail was developed further in consultation with the Project
Team and the following final version was incorporated in a survey to gather feedback.
Final Preferred Future
Key elements of the envisaged Preferred Future for 2029 were:
•
Differentiated - world leading supplier of an elite quality cotton that is highly sought in
premium market segments
•
Responsible - producer and supplier of the most environmentally and socially
responsible cotton on the globe
•
Tough - resilient and equipped for future challenges
•
Successful - exciting new levels of performance that transform productivity and
profitability of every sector of the industry
•
Respected - an industry recognised and valued by the wider community for its
contribution to fibre and food needs of the world
•
Capable - an industry that attracts and develops highly capable people
The full narrative of the Preferred Future is provided in the Appendices.
Emergent Futures – Cotton Industry Vision 2029, Final Report
14
5.2 Vision Statement
Principles and underpinning elements for the type of vision desired were identified by the
Reference Group.
Vision Principles
•
•
•
•
•
•
•
•
•
•
•
intent of a shared vision - to help inform organisations and sectors to enable alignment
rather than telling them what to do
Involves all aspects of industry and cotton community
Vision that is also a strategy
Unifying and aspirational
Bold
Strategic intent
Tells a story – dispelling myths, shows how industry is addressing issues
Includes a concise statement
Every sector is comfortable to tell the story and use the story
Preferred future
Important part is how we take it back to sectors and get buy in, how do we ‘sell’ it.
Underpinning Elements
Critical Uncertainty
Vision Elements
Climate variability
• Resilience
Water availability
• Technology, innovation, advocacy
• Premium for Australian cotton
• Improving productivity
Competitiveness with
food
Competitiveness with
man made fibre
Product differentiation
Grower dedication
Industry profitability
•
•
•
•
•
•
Improved quality traits
Capitalise on natural, wearable
Environmental footprint, carbon
Very high, premium quality recognition, consistency of delivery
People – knowledge and skills
Uniquely Australian – the story
• Personal success (profitability), recognition (valued by
community)
• Sense of belonging, identity as cotton grower
• High but not strong relationship between profit and choice
(water is the key)
A facilitated process with three small groups was used to generate draft vision statements for
industry. At the end of the process there were five different vision statements however no single
statement stood out as a clear preferred choice.
Draft vision statements
•
•
•
•
•
Australian cotton industry – creating a unique future
Australian cotton – worlds best getting better
Command the market space that is the envy of the world
Australian cotton – most wearable and world friendly (facilitators perspective –
customer oriented)
Australian cotton – world’s best. Creating a unique future that is the envy of the world
(combination of other statements)
Emergent Futures – Cotton Industry Vision 2029, Final Report
15
The Reference Group decided to seek suggestions on possible vision statements as part of the
second stakeholder opinion survey process before finalising a vision statement. The
suggestions received as part of the survey were considered at the third and final workshop of
the Reference Group on 15 March 2010.
Stakeholder vision themes
•
•
•
•
•
•
•
•
•
•
•
•
•
Product
Environmental performance
People – safe, empowered, career path
Profitable
Worlds best
Uniquely Australian
Favourable reputation
Environmentally friendly production, green, clean
Resilient
Importance of people
Culture of innovation
Sustainable
End user linkage eg. Wearability
These themes were considered to be quite similar to those in the Preferred Future with no
significant differences of note. The Reference Group determined that a short simple statement
was the preferred style for a vision statement and worked to develop vision statements based
on the themes and vision principles.
Draft vision statements
•
•
•
•
•
•
•
•
Aussie cotton, world’s best naturally
Aussie cotton – achieving a sustainable future for the cotton industry through ambition,
collaboration and innovation
Aussie cotton – (followed by 6 themes from the Preferred Future)
Aussie cotton - world’s best
Australian cotton, naturally the best
Australian cotton, wear the best
Australian cotton, naturally wear the best
Australian cotton, wear natures best
Australian cotton, carefully grown, naturally world’s best
Australian cotton, carefully grown, world’s best naturally
Final preferred vision statement(s)
•
•
st
Australian cotton, carefully grown, naturally world’s best (1 )
Australian cotton, carefully grown, world’s best naturally (2nd)
This vision statement is to be followed by the six themes from the Preferred Future.
Further consultation on the vision statement is to be part of the industry communication and
engagement activities following the project.
Emergent Futures – Cotton Industry Vision 2029, Final Report
16
6. Next Steps
The development of strategy for implementation of the vision was considered at the final
workshop. The Reference Group agreed that ACIC was the appropriate vehicle for managing,
monitoring and reporting on progress of the vision and strategy. A series of next steps were
identified:
•
•
The vision is to be owned by industry and managed by ACIC
A communication and engagement strategy for the vision is to be developed by CRDC
and Cotton Australia
•
Further development of strategy will be coordinated via ACIC with the next ACIC
meeting to consider how this would best be achieved
•
As a first step, existing strategies/targets from the various organisations are to be
collated and aligned to the Preferred Future themes prior to the next ACIC meeting
•
•
•
Assessment of gaps and priority areas will be discussed at the ACIC meeting
Options for monitoring of scenario indicators will be discussed at the ACIC meeting
A final report on the project will be prepared by the consultant
These activities are to be coordinated initially by Bruce Finney, CRDC, with assistance from the
Project Team.
7. Recommendations
Following are some final recommendations from Emergent Futures with regard to how industry
approaches the next steps in progressing its vision and strategy:
Engagement - Industry engagement in the project processes has been adequate for the work
undertaken to date. Broader engagement and consultation will be critical to adoption and
support for the vision. There are two components to this: firstly boosting general awareness of
the project outcomes and vision, and secondly, generating active endorsement of the vision. It
is recommended that all sectors take an active role in engaging their constituents and
demonstrating support for the vision.
Strategy - A strong sense of expectation around having a plan for implementation of the vision
now exists across industry from the consultation and engagement processes undertaken. It is
recommended that industry take advantage of this interest and enthusiasm to progress further
development of strategy as a matter of relative urgency and avoid the risk of negative sentiment
towards the vision developing should action be delayed. Engaging critical stakeholders in
development of strategy would provide both engagement and commitment of necessary
resources for strategic implementation. Also the advantages of including diverse perspectives
should not be overlooked when assembling people for strategy development – this activity
should not be left to the ‘usual suspects’ only.
Succession - The opportunity to engage the next generation of industry leaders in the next
steps should be actively pursued to ensure buy in from this group and provide them with skills
and knowledge to take the industry vision forwards.
Monitoring – Defining a preferred future is no guarantee of certainty. The scenarios developed
provide some guide as to alternative possible futures and should be used as a tool to monitor
the actual direction that industry may be headed. Monitoring the scenario indicators can help
provide an early warning system on shifts in the operating environment and give the industry
time to reconsider its direction and strategy where necessary. In addition to the scenario
Emergent Futures – Cotton Industry Vision 2029, Final Report
17
indicators, monitoring of the assumptions underpinning the Preferred Future and vision is also
important. Establishment of a system for regular monitoring is recommended.
Sandy Teagle
Emergent Futures
28 March 2010
Emergent Futures – Cotton Industry Vision 2029, Final Report
18
8.
Appendices
8.1
List of Project Reports
•
Stakeholder Opinion Survey 1
•
Environmental Scan
•
Cotton Industry Scenarios 2029
•
Cotton Industry Preferred Future 2029
•
Stakeholder Opinion Survey 2
•
Workshop 1 Report – 2 November 2009
•
Workshop 2 Report – 25 November 2009
•
Workshop 3 Report – 15 March 2010
8.2
Stakeholder Opinion Survey 1 – Summary
A link to an online survey with 14 questions was forwarded to an identified list of stakeholders
via email as well as being advertised in industry publications/websites by industry
organisations.
Total survey responses: 53
Breakdown by sectors:
Cotton producers/farmers: 17
Research: 12
Merchants/marketing: 6
Inputs/suppliers: 5
Consultants: 4
Extension/education: 4
Other: 3
Phone interviews were conducted with a range of people from across the cotton value chain
(input providers, growers, researchers, service providers, ginners, marketers) plus one outsider.
Similar prompting questions were used to the online survey.
Total interviews: 14
A similar range of issues, perspectives and visions were raised in the interviews as in the
survey responses. Below is the analysis of the survey responses plus insights from the
interviews. A selection of some of the interesting points raised or different perspectives noticed
in the interview process are provided at the end of this report.
Issues
Water was the most commonly mentioned issue across all areas of the survey.
Water availability, access, and water use efficiency were consistent themes.
Emergent Futures – Cotton Industry Vision 2029, Final Report
19
Other common themes were:
•
•
•
•
•
•
•
•
•
•
•
•
Quality
People
Demand
Industry size and infrastructure
Technology and GM
Prices and costs
Drought
Climate change and carbon
Competition
Environment
Research
Consumer and government attitudes to agriculture
Overall the responses reflected issues that are present today or emerging in the short to
medium term. There were few responses that indicated more diverse influences into the longerterm future with most sticking to common themes. There was an absence of factors outside the
immediate industry that might impact including communication/internet technology advances.
Vision
Respondents in general have a very positive view of the cotton industry, pride in its past and
hope for its future. This is likely to be adding to a desire to perpetuate a ‘cotton industry’
however there are also drivers that suggest the future may not be made up of separate
industries or ‘cotton’ growers.
Views were relatively conservative – there were no visions for radical change or transformation
of the industry, nor many thoughts that the industry would cease to exist (assuming that it would
rain again one day). The need for continuous improvement across the supply chain was
recognised to try and keep up with the challenges faced by industry.
Many saw the industry continuing to have a place as a provider of high quality cotton. For some
this was a smaller niche. Some thought there would be a greater shift towards integrated
systems with cotton as part of the mix, more dryland cotton, and cotton production in new
geographic areas. There were quite a few references to potential demise of the traditional
‘cotton grower’ and a shift to being ‘irrigators’ reflecting the greater integration of cotton within
cropping systems.
People issues also featured including the need for ongoing programs for development of young
leaders, declining scientific population, competition for labour, and potential decline of rural
communities. Preferred industry futures were often described in terms of the attributes of its
people – vibrant, enthusiastic, cohesive, responsive, dynamic, innovative, collaborative, exciting
and attractive.
My sense is that the industry is moving into a new phase and is perhaps on the cusp of
reinventing itself or settling into a comfort zone or taking whatever future presents itself.
General Observations
Water is a dominant issue. We wonder if this is clouding the ability to see other factors that will
impact significantly in future.
Emergent Futures – Cotton Industry Vision 2029, Final Report
20
Industry need to be asking “What is the next ‘water’ type issue on the horizon for cotton?”
There are some strong assumptions around future competitiveness of cotton as a natural fibre
vs synthetics. Good arguments were presented for both but industry need to know what the real
drivers of purchasing decisions will be in the future rather than assuming natural will be an
advantage. There is also a presumption that distinct categories of natural and synthetic exist.
Perhaps this is so from an industry perspective but what is the view from consumer/apparel
industry/textile manufacturer – is cotton just another fibre to be mixed and matched with others
to suit endless purposes? What does this mean for future products and positioning?
A longer-term view on fibre competitiveness is needed and assumptions need to be challenged.
A majority of respondents thought competitive position compared to other countries would not
improve (it would stay the same or decline). This seems at odds with a more positive overall
view of the likely futures suggested.
Views of competitiveness against other producing countries seem short term and may be
underestimating the potential speed of advancement of competitors. There is an assumption
that Australia will have the world’s best quality. Many saw this as a competitive advantage. Will
this be achievable when drivers are pushing industry in a different direction - particularly if
mixed cropping and dryland systems increase and growers drop in and out of cotton production
and have less dedicated attention to cotton BMP? What will the impact of this production
variability be on viability of supporting infrastructure and services? What is the tipping point for
low capacity utlisation leading to lower incentives for new capital investment, higher production
costs and defection of talent to other areas/inability to attract new talent?
Assumption that further gains in efficiency and productivity will continue. At what point are these
exhausted, are we overestimating our capability and underestimating others?
Competition for food could be a major issue and this was raised with various perspectives on
how this might impact from reducing competitiveness of cotton to improving cotton prices and
profitability. Possible consequences need to be explored further.
Many thought farms would be fewer and more corporate in the future. How will this impact on
the identified need for industry leadership, connectivity, innovation, and collaboration in future?
How does it impact rural communities and future attractiveness of industry to people?
Respondents have a very positive, proud view of the cotton industry’s past which has
experienced good times. This may be influencing assumptions about the continued need for
and value of the industry in the future. This seems to be reflected in the comments about the
need to educate the public about the industry’s value and a desire for positive recognition of the
industry by government and public. Have other industries succeeded in doing this in the past or
is this just wishful thinking? Is recognition and government support actually needed or can
industry manage without it? Future attitude to agriculture (government and public) was a key
concern raised and is an area of uncertainty that may be worth further exploration.
Scenario possibilities
Based on the issues and uncertainties we see emerging from the survey data, there are a
number of possible drivers for scenarios. These will be explored further at the workshop.
Emergent Futures – Cotton Industry Vision 2029, Final Report
21
8.3
Scenarios
Below are detailed descriptions of the four scenarios developed during the project. The
scenarios marked ‘draft’ are to be updated with revised versions.
Scenario 1: Food Replaces Fibre (draft)
Critical uncertainties
Climate variability
Water availability
Competitiveness with
food
Competitiveness with
man made
Global competitiveness
Product differentiation
Cotton grower dedication
Cotton industry
profitability
Scenario snapshot
1
Food Replaces Fibre
Scenarios
2
Boom
3
Bust
4
Present Day
High
Less (varies
across valleys)
High
Medium
Medium
Low
High
Low
High
High
Low &
High
Low
Low
High
Low
Medium
Reducing
Low
Low
Low
Medium
Medium
High
High
Low
Low
Low
Low
Medium
Medium
Medium
Medium
Continued growth in population and affluence, results in increased
demand for food and especially protein.
Diminishing resources creates competition between food and fibre
for resources.
Lack of coordinated global response to food crisis increases scale
of problem and level of competition.
Narrative
While experts warned of an impending food crisis for many years, the world, caught up in the
after effects of a global financial crisis and climate change debates, collectively did nothing to
avert this. As some had earlier forecast, a perfect storm of increasing population, rising
affluence, demand for biofuels, diminishing resources and climate instability ultimately lead to
severe global food shortages in 2013 as crop failures due to climatic events in multiple
countries coincided with lowest ever grain storage levels.
Many starved in less advantaged regions while food prices soared for consumers globally.
Protein was especially out of reach for many as collapse of wild fisheries and reliance of
aquaculture on grains and wild caught fish reduced supplies, and cost of grain-fed animals
skyrocketed.
A renaissance in home veggie gardens and community gardens emerged. Farmers expanded
production into marginal land in a bid to capture record high prices. Large areas of fibre crops
were replaced with food crops and cotton production in India and China in particular decreased
substantially. Price of cotton increased due to reduced supplies but it was no longer competitive
with man made fibres and synthetics and alternative fibres gained the majority of market share
as the bulk of the population could no longer afford cotton. Globally underutilised cotton
processing infrastructure was decommissioned or converted for other uses spelling the end of
cotton’s dominance. A high value niche market for cotton products for affluent consumers
continued to be supplied sporadically from growing regions unsuited to food production.
In Australia this meant cotton production contracted to some of the more marginal areas too far
from markets to suit perishable crops plus the occasional opportunist cotton rotation in other
Emergent Futures – Cotton Industry Vision 2029, Final Report
22
areas when seasonal conditions were favourable. Grain or vegetable production took over most
cotton production areas and the cotton supply chain became an aside to the bigger business of
food chains. Cotton was still exported to Asia for processing as cheap labour became plentiful
with thousands hungry for work to gain better food security.
Despite the crisis-induced rapid switch to food production, once the immediate crisis was over,
ongoing yield declines due to climate change impacts and increasing population kept food
supply tight and prices high long term. Protectionist policies re-emerged in response to long
term food security concerns. Countries hoarded food exacerbating undersupply and instability
in food insecure regions. As time wore on and environmental systems increasingly collapsed
under intensive use and pressure, conflicts over resources escalated. Nations agreed that a
collective long term response to food and security was needed and the earlier competitive dog
eat dog attitude between countries began to diminish. An agreement to establish a global food
bank to support nations in crisis was established and collaboration increased on research and
technology developments to maximise productivity and restore environmental balance following
the poorly managed food rush.
A global shift in values emerged bringing a strong backlash to consumerism and move towards
minimal footprint. Resource efficiency and zero waste became imperatives and brought about
major changes in global systems.
Environmental resources in Australia became tightly regulated. Specific licenses were required
for all farming operations and crop choices and resource use were closely monitored putting an
end to opportunistic production decisions. Increased Government investment in GM R&D led to
increased use of GM crops with lower environmental footprint.
Consumers became more accepting of GM food crops partly due to their environmental
benefits but also due to lack of choice and high price of alternatives. The attributes of GM food
crops also enabled these to be grown viably in what were marginal regions, resulting in
increased competitiveness with cotton.
By 2029, research into alternatives to biological-based food production systems to provide
cheap, reliable sources of nutrition are close to solutions for overcoming climate vagaries to
eliminate prospects of future food shortages. The future of food is looking very different indeed.
Scenario 2: Boom (draft)
Critical uncertainties
Climatic variability
Water availability
Competitiveness with
food
Competitiveness with
man made
Global
competitiveness
Product differentiation
Cotton grower
dedication
Cotton industry
profitability
Scenarios
3
Bust
1
Food Replaces
Fibre
Medium
Medium
2
Boom
Low
High
High
Low & High
Low
High
Low
High
Less (varies across
valleys)
High
Low
High
Low
Medium
Reducing
Medium
Low
Medium
Low
Low
High
High
Low
Low
Medium
Medium
Low
High
Low
Low
Emergent Futures – Cotton Industry Vision 2029, Final Report
4
Present Day
23
Scenario snapshot A
The wettest of the Global Climate Models emerges, resulting in
increased rainfall and runoff and improved water reliability. Continued
population growth creates additional demand for increasing supplies
of food and fibre.
Scenario snapshot B
The drier of the Global Climate Models emerges, resulting in reduced
rainfall and runoff and lower, but more predictable, water availability.
Coordinated global response to food crisis results in increased
investment in ag R&D and infrastructure. Improved efficiencies
overcome water availability and competition with food.
(A) Low climatic variability improves water availability
Narrative
Early Global Climate Models had high levels of uncertainty regarding regional rainfall response
to global warming. Scenarios for rainfall in the Murray Darling Basin ranged from reduction of
up to 50% to an increase of up to 30% in different parts of the basin by 2030 (compared to
3
1990 rainfall levels). In 2010 the region experienced above average rainfall which provided
relief from drought conditions. By 2015 it seemed a wetter period had emerged with good
rainfall and runoff being more common. By 2025 rainfall had increased by 30% across the
basin, more than climate models originally projected. Other agricultural regions, particularly in
northern Australia, also experienced improvements in rainfall reliability over this time.
Globally, changes in rainfall were more variable between regions but overall higher rainfall
prevailed. Around the globe stressed water systems were gradually recharging after decades of
over-extraction. In areas where water was the main limiting factor, with a return to more reliable
seasonal conditions and improved productivity, agriculture boomed. For a short time this
resulted in lower commodity prices as supply outpaced demand. However, as population
expanded and non-water based limitations to production increased, supply and demand leveled
out and prices improved.
The main limitations to agriculture now became land, fertilizer and labour. Urban encroachment
in Asia from a rapidly expanding population meant most of their advances in production were
offset by land use change and reliance on imports slowly increased. Yields in poorer countries
were impacted as escalating cost of fertilizer held them back. Access to labour was a major
issue for Australian producers competing with the mining sector.
The cotton industry in Australia experienced a resurgence with reliable supplies of water. The
MDB once again had plentiful water and regained its status as a major food and fibre
production bowl. Cotton again became an important irrigation crop. Buyers of Australian cotton
welcomed the near-record volumes produced, giving them a reliable supply of high quality
cotton. With improved profitability, the cotton industry strengthened its commitment to BMP and
efforts to differentiate Australian cotton resulting in a globally recognised brand attracting
premium prices. Australia’s global cotton competitiveness increased on the strength of its
quality and reputation. While other countries all had access to similar cotton genetics and
production technologies, the quality differential for Australian cotton continued to be maintained
due to faster rates of adoption and investment in BMP.
Man made fibres faced problems with Peak Oil indications becoming stronger in 2017 and
concerns about biodegradability, recycling and human health impacts increased. Naturalness
and abundance of cotton along with increasing affluence made it a popular choice. The man
3
CSIRO, October 2008, Water Availability in the Murray Darling Basin, p24
Emergent Futures – Cotton Industry Vision 2029, Final Report
24
made fibre industry began diversifying into producing fibres from plant-based oils in an attempt
to secure new resources and improve its image.
Australian cotton producers were again confident to forward sell cotton knowing water
availability and production was reliable and predictable, if not consistent. The industry was
confident to forward plan and invest in people, businesses and R&D. Positive mental health
was a welcome change. Many Baby Boomers left the industry between 2016-20, retiring after a
series of good crops and increased property values left them in a good financial position. Their
place was taken by corporate farms or other progressive cotton farmers.
While the world is experiencing a resurgence in agricultural productivity, consequently
population growth appears to be increasing at a faster rate. Concerned scientists and
environmentalists warn that, despite the vastly improved water situation, this has lead to
complacency and other resources are being over exploited. In 2027, an alternative review of
Global Climate Models suggests the wetter period is breaking down and a more violent and
rapid climate change may be imminent.
(B) Water variability overcome via technology and systems
Narrative
The message on the potential for a global food crisis eventually begins to sink in after a serious
scare in European production due to climatic events in 2010. World leaders agree that a
second green revolution is needed to be able to feed and clothe the population of 9 billion by
2050 while at the same time significantly cutting back greenhouse gas emissions to avoid
climate change. A coordinated multinational effort begins with significant increases in
collaborative research to generate higher yielding varieties and more sustainable practices. The
FAO together with global leaders and major philanthropic organisations launches ten X Prizes4
of $10m each for the development of solutions to biological productivity limitations in 2012. The
increased investment pays off with rapid advances in genetics, technology and systems that
reduce existing wastage, streamline supply chains for maximum efficiency and improve
productivity and resource use 10-20 fold in some areas.
The cooperative global effort ensures that the transition is smooth without the usual wild swings
in production ups and downs in a lagging response to market price signals. Importantly the
feared drop in fibre production due to pressure on land and water resources for food is avoided
with only the most unproductive farmers or inefficient crops being replaced. Cotton gains
enhanced traits which improve value of cotton seed as a food source for human and livestock
use, perennial cropping for minimum tillage system, and reduced plant water requirements.
With the new level of concern for increased and sustainable production, strict regulation of
resource management emerges and increased government investment in water infrastructure
to replace inefficient systems and satellite monitoring enables both improved efficiency and
accurate monitoring. Real time electronic monitoring of entire farming systems which is instantly
compared and contrasted with data from other properties and meteorological forecasts provide
vastly enhanced decision making capabilities. Under-performance is also flagged with virtual
agronomists who provide advice on performance improvement strategies. Continued
underperformance leads to investigation and potential revocation of the Social Farming License
in extreme cases of mismanagement or neglect.
4
The X Prize Foundation is about bringing radical breakthroughs for the benefit of humanity. An X PRIZE
is a $10 million+ award given to the first team to achieve a specific goal, set by the X PRIZE Foundation,
Rather than awarding money to honor past achievements or directly funding research, an X PRIZE incites
innovation by tapping into competitive and entrepreneurial spirits. http://www.xprize.org/
Emergent Futures – Cotton Industry Vision 2029, Final Report
25
The burden of extreme water variability that once plagued the industry has been effectively
offset by the trend to Global Climate Models with lower but more predictable rainfall and rapid
advances made in resource use efficiency, water infrastructure and climate prediction that have
helped to level out supply issues and give greater certainty to producers.
While water availability is far less than in the past, farmers have the varieties, systems and
skills to produce far more with much less. Producers are now confident to forward sell cotton
knowing water availability and production will be reliable and predictable, if not consistent. They
are confident to forward plan and invest in people, businesses and R&D. Positive mental health
is a welcome change.
The transition has not been easy however with some of the less technologically inclined
farmers unable to manage the new systems. Many Baby Boomers have left the industry and
their place has been taken by corporate farms or those remaining have employed graduates
with crop management IT diplomas to help manage the crop manipulation processes and
integrated software.
As other countries all have access to similar cotton genetics and production technologies, yet
the gap in quality differential with Australian cotton continues to be improved as Australia
retains a lead in faster rates of adoption and credible regulated performance systems. Brand
awareness is now a major advantage as strong social networks and access to real-time product
footprint information ensures consumers are instantly updated on EcoSocial ratings of products.
Scenario 3: Bust (draft)
Critical
uncertainties
Water variability
Water availability
Competitiveness with
food
Competitiveness with
man made
Global
competitiveness
Product
differentiation
Cotton grower
dedication
Cotton industry
profitability
Scenario snapshot
Scenarios
3
Bust
1
Food Replaces
Fibre
Medium
Medium
2
Boom
4
Present Day
Low
High
High
Low & High
Low
High
Low
High
Less (varies across
valleys)
High
Low
High
Low
Medium
Reducing
Medium
Low
Medium
Low
High
Low
Medium
Low
High
Low
Medium
Low
High
Low
Low
Climate change induced high variations in rainfall: seasonal/ regional/
local.
High variation in production in line with rainfall variation.
Fewer dedicated cotton growers as production systems become more
diverse cropping systems to adapt to water variability.
Decline in production, quality and reputation leads to critical mass
tipping point.
Narrative
Volatility of water availability increases – El Nino patterns appear to be disrupted and the usual
seasonal indicators no longer seem to hold. Many believe this to be the early stages of Climate
Emergent Futures – Cotton Industry Vision 2029, Final Report
26
Change becoming visible however others still believe it is simply long term variability as
opposed to the relatively stable climatic period experienced over the last 100-200 years.
Earlier haphazard government water buybacks have taken out some of the larger most secure
water, leaving some of the most strategically placed and productive land without water and
consequently local infrastructure in decline due to unsustainable throughput. Future regulation
of water continues to be an unknown - despite a trend for increased regulation including
groundwater monitoring – decisions still have a tendency to be short-term and reactive, with
water allocations changing frequently and no longer term certainty for growers. Rainfall events
are patchy with isolated areas at times having good runoff which fills storages enough for 1-2
years cropping while other neighbouring properties miss out. The good rainfalls of 2010-11 in
particular lull agriculture into a false sense of security before drought conditions once again hit
hard.
With no certainty in sight, farming systems continue to be severely stressed and many of those
that managed to hang on through the lengthy droughts of the 2000’s finally crumble under
financial and emotional stress. Banks reassess finance according to water security. Mortgagee
sales of farms peak in 2013. Those on prime land which still have water rights intact are quickly
bought up by corporate farms (eg. Sustainable Agriculture Fund) that have access to capital
and that see longer term potential in future food demand, water trading and developing further
economies of scale and diversity of holdings. More marginal farming country without water
rights is picked up by investors interested in speculating on future food demand who take a
pure risk management approach and are confident in advancements in dryland systems
enabling better returns from opportunistic cropping. In an interesting development a larger
parcel of such properties are bundled together and sold to a Chinese investment group which
puts the land up for lease, no doubt seeing this as a strategic way of securing land as a future
food insurance policy as they have done in many other less developed and less stable nations.
Remaining cotton farms become much more integrated multi-crop systems as producers
choose to grow crops with best market return at the time that suit the level of water available at
the time. Consequently cotton supply becomes quite variable and commitment to BMP suffers
as well. With quality and reliability of supply dropping, Australia’s once envied reputation as a
premium supplier diminishes. This has negative consequences for competitiveness of the
Australian cotton industry globally.
Skilled and semi-skilled labour is lost as the system of support industries around cotton
degenerates as reduced business and funding for suppliers, contractors, ginners and
researchers leads these to seek work from alternative industries to keep afloat. Despite some
of the more progressive cotton farms still being viable, slowly the erosion of critical mass
reaches a tipping point in 2025 where loss of infrastructure and key personnel is simply too
much to continue support of cotton even as a rotation crop. The once bright Australian cotton
industry is relegated to wistful memories and agricultural museums and the last vestiges of
cotton industry organisations are subsumed by the cross-industry organisations which began to
emerge in 2012.
Australian consumers continue to purchase cotton goods manufactured in China and India
while cotton products from Fairtrade Eco Alliance producers captures the market of social and
environmentally conscious affluent consumers. With regretful hindsight, those who were once
part of a dynamic cotton industry now realise the missed opportunity to differentiate Australian
cotton for this premium segment before the broader challenges to the industry became
overwhelming, may have enabled a small niche production sector to continue.
Emergent Futures – Cotton Industry Vision 2029, Final Report
27
Scenario 4: Present Day Projection
Critical uncertainties
Water variability
Water availability
Competitiveness with
food
Competitiveness with
man made
Global
competitiveness
Product differentiation
Cotton grower
dedication
Cotton industry
profitability
Scenario snapshot
Scenarios
3
Bust
1
Food Replaces
Fibre
Medium
Medium
2
Boom
4
Present Day
Low
High
High
Low & High
Low
High
Low
High
Less (varies
across valleys)
High
Low
High
Low
Medium
Reducing
Medium
Low
Medium
Low
Low
High
High
Low
Low
Medium
Medium
Low
High
Low
Low
Disruptive changes in water availability as a consequence of water
reforms and policies. Variations in water availability between regions.
High competitiveness with food, retention of skilled people, but low
profitability due to increasing cost of production.
Narrative
As highly variable climatic conditions continued, cotton production fluctuated from season to
season and valley to valley. Historic production highs were a distant memory as lower water
availability due to water reforms effectively limited production in the early years. In the good
rainfall years excess water was available for sale and a lucky few in these areas with the
financial resources available were able to make use of this. As time went on productivity
improved as R&D made new varieties available and improved water efficiency of systems. The
cotton crop became a strong mix of dryland and irrigated, a change of pace from its days as
primarily an irrigated crop.
Cotton farms increasingly became combinations of irrigated cropping (cotton, grains and
pulses) and dryland systems, integrated to adapt to seasonal conditions and water availability.
There are still a modest number of growers who are primarily cotton growers, the remainder
tend to refer to themselves as ‘part-time irrigators’ or ‘rainfall speculators’ rather than ‘cotton
growers’. All of these farmers faced increasingly legislative and public pressure to continually
improve their water use efficiency.
The steady trend of farm corporatisation continued aided by increasing retirement of Baby
Boomer farmers from 2010 onwards. At the same time, singular mega-farms declined as a
business model, and were generally split into smaller operations and became part of the
corporate operations. By 2020 a major change in Australian agriculture had occurred with more
than 50% of properties being corporately owned amalgamations and these accounting for over
90% of production. Industry representative systems were challenged by this and subsequently
lost relevance in the face of industry and government. Seeing the writing on the wall, in 2015
cotton and grain industry organisations merged to try and sustain relevance to the new face of
agriculture and gain efficiencies from pooling diminishing industry and government funding.
Earlier research efforts into water efficiency, drought tolerance and higher yielding varieties,
chemical reduction and dryland systems helped growers to keep pace with the increasing
environmental pressures and expectations of society. By 2020 the impact of an ageing industry
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and research workforce had hit hard, although improved technology and the use of shared
labour between farms helped offset the negative impact of the skills shortage. A core group of
dedicated researchers continued to deliver excellent outcomes for the industry, although the
actual number of researchers was smaller than 20 years ago because of a lack of big seasons
to attract new brains to the industry. The merged industry organisations survived due to
combined capacity to retain highly skilled multidisciplinary researchers and other staff.
As food production became a higher priority for other major cotton producing countries,
particularly rapidly growing populations like China and India, global cotton supply was reduced
and cotton prices increased modestly. Food security and protectionist policies in these
countries ensured that investment in adoption of GM technology and improved farming
practices for food production increased rapidly in China and India, helping to meet increasing
food demand and preventing massive global food price increases. Consequently the relative
competitiveness of cotton to food production in Australia remained high, supported by the ever
reducing footprint of cotton due to effective R&D programs and prevention of increasing food
prices due to overseas production and protectionist policies.
Despite higher global cotton prices, profitability of Australian cotton production remained lower
than historical levels as costs of farming in Australia continued to increase due to loss of scale,
higher water, land and labour prices and added expenses associated with carbon, water, social
and environmental accounting which other countries did not account for. Pressure on labour
resources particularly increased as development in China resurged in 2012 after the global
economic downturn and the Australian mining industry once again gained momentum. Farms
with available capital invested in labour saving technologies while some farms without financial
reserves learned to ‘make do’ or were forced temporarily to switch to less labour intensive
crops with cotton being a casualty in some areas.
Small cotton communities declined in population, while larger regional towns such as Narrabri,
continued to grow, due to economic diversity and the gravitation of the population away from
very small centres.
Looking back from 2029, continuation of the status quo has seen the industry travel backwards
as its competitors moved forward. The same pressures of 20 years ago exist, with the industry
facing ongoing challenges from diminishing profitability, climatic variability, and labour
availability. Global competition rapidly increased as emerging economies rapidly adopted new
technology, both mechanical and biological. In many ways, because the challenges were
incremental and small on their own, the industry did not realise in 2029 that it had faced a slow
suffocation from its former glory days.
8.4
Preferred Future
Australian Cotton Industry 2029 - Preferred Future
Introduction
In 2009 Australian cotton industry leaders saw that industry faced a choice about its future – to
either let its fate continue to be significantly influenced by negative external factors or make a
bold attempt to create a desirable future in the interests of the industry, community and
environment. The industry leaders chose the latter, kicking off with a foresight project ‘Cotton
Industry Vision 2029’ in September 2009 to explore forces of change and future possibilities.
The activity is bringing all sectors of the industry together to create a collective vision for the
future to guide and inspire progress.
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The intent of a shared vision is to help inform organisations and sectors to enable alignment of
thinking about the future.
There are a range of possible futures that the Australian cotton industry might face from a
booming resurgence to decline and collapse. Critical challenges and uncertainties were
identified at the beginning of the project and these have been explored in four separate
scenarios: Boom, Bust, Food Replaces Fibre, and Present Day. From these scenarios a draft
preferred scenario or future for the Australian cotton industry has been developed.
Below is a summary of this preferred industry future. This represents a vision of how the
industry might look in 20 years time (2029) having overcome challenges from its present
situation.
The Journey
In the years leading up to 2009, the cotton industry had experienced particularly hard
conditions. Drought had plagued many regions and government reforms ensured water security
was at an all time low, the cotton labour force was being ‘mined’, while climate change and the
carbon pollution reduction scheme were big challenges knocking on the door. Industry
rationalisation, public and political perceptions towards farming had all taken a toll. Industry
confidence, profitability and resilience were waning. Some people felt the industry was in dire
straits while others were cautiously optimistic that it would again rebound when conditions
improved.
The industry needed to find a way past the current major challenges to create a preferred
future. The leaders identified that the challenges could be overcome through a combination of
repositioning the industry in the global marketplace and achieving superior industry
performance underpinned by science, technology and the passion and innovative nature of
people within the industry. Clearly this would involve every link in the industry from seed and
chemical distributors, growers, consultants, researchers, pickers, truckers, ginners, classers,
merchants, spinners and brand owners.
Key elements of the envisaged Preferred Future for 2029 were:
•
Differentiated - world leading supplier of an elite quality cotton that is highly
sought in premium market segments
•
Responsible - producer and supplier of the most environmentally and socially
responsible cotton on the globe
•
Tough - resilient and equipped for future challenges
•
Successful - exciting new levels of performance that transform productivity and
profitability of every sector of the industry
•
Respected - an industry recognised and valued by the wider community for its
contribution to fibre and food needs of the world
•
Capable - an industry that attracts and develops highly capable people
In achieving the above elements, the industry would be well positioned to deal with foreseeable
emerging challenges such as peak oil, competitiveness with food crops, bio-identical cotton
substitutes and additional issues yet to be identified.
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The Destination - What Industry Looks Like in 2029
Differentiated
• In 2010 the Australian cotton industry recognised the need to differentiate its product and
build a brand and strong positioning in the global marketplace to support this. The industry’s
pre-existing reputation for quality, contaminant free and environmentally responsible
production characteristics provided a good basis. A collaborative approach across the chain
was developed to better understand future consumer and manufacturing needs and
competitive forces. The combined effort and resources have lead to the development of a
uniquely Australian brand owned and supported by the whole industry.
• Over time unique varieties adapted to Australian conditions have been developed to meet
the brand requirements.
• Improved productivity and returns have resulted in a dedicated cotton production sector
committed to best management practices. Extensive effort has been put into developing
people with the knowledge and skills to achieve quality standards and maintain production
levels.
• New traceability technology helps ensure product integrity and has transformed supply
chain logistics.
• A small onshore manufacturing capacity has been established, supporting a 100%
Australian natural fibre product niche, as growth in local manufacturing became viable based
on the emerging interest in ‘on-shoring’ (return to local manufacturing as transport costs
escalate), new manufacturing technology and proper environmental accounting.
• The industry has new partnerships with leading global and Australian brand owners in
developing and marketing new textile products.
• International consumers readily recognise the Australian cotton brand which enjoys a
favourable reputation of similar standing to Egyptian Cotton, Supima, French champagne
or Belgian chocolate – elite quality.
• Personal success and recognition reignite a sense of belonging, identity and passion for
the cotton industry. Community spirit and collaboration have helped the industry pull together
to achieve stretching goals and to weather hard times.
Responsible
• Once perceived by those outside the industry as an environmental vandal and water waster,
Australian cotton is now valued for its credentials as the most environmentally friendly
cotton production system on the globe with the lowest water use, carbon footprint and
chemical use of any cotton producing region.
• Australian cotton is the world’s first cotton producer and first Australian agricultural sector to
achieve international recognition for carbon neutrality. It is now the highest rating cotton
5
producer on the international Corporate Social Responsibility Index (CSRI) .
• Environmentally friendly easy care cotton products have been developed and are increasing
their share of apparel sales world wide.
• The industry boasts the best health and safety record of any agricultural industry through
its dedication to improved health and safety practices for employees and business owners.
• Working conditions surpass those of all other cotton producing nations.
• Through continuous improved performance on efficiency and responsibility of water use,
cotton has a reputation as a valued and responsible water user.
5
Such an index does not exist at this time but we anticipate something of this nature into the
future.
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Successful
• Industry enjoys improved profitability overall through successful positioning in a high value
market segment and new levels of industry performance.
• High returns and improved productivity of elite cotton ensure production is competitive
with food production.
• Australian cotton was a leader in the advancement of energy and water saving technology,
soil bio-enhancement, varietal improvement and supply chain efficiency to create exciting
new levels of industry performance.
• While water availability continues to be variable in 2029, innovation and new technology has
enabled vastly increased water efficiency. Cottons previously enviable productivity per
litre of water has surpassed all expectations – returns are comparable to, and sometimes
greater than, the highest value food crops. Successful advocacy has translated this into
improved water access and security.
• Water efficiency improvements have been achieved not only through production and
manufacturing practices but also due to new low and no water washing technology
contributing to the overall lifecycle efficiency of cotton. Lowest environmental footprint of all
fibres, ease of recycling and natural, wearable characteristics of cotton are its key selling
points and help maintain its competitiveness with synthetic fibre choices.
Respected
• Industry has gained recognition from government and community for the quality of its
products, sustainable practices and contribution to the fibre and food needs of the world.
• As a leading industry in productivity growth through innovation, there are significant
spillovers from the knowledge, practices and technology developed through cotton R&D
being adapted and applied in the production of food crops.
• Australian consumers can now purchase and are proud to wear Australian cotton
garments and textiles, confident in the quality and the story behind the product which
supports their values and makes them feel good about supporting their local industry and the
people in it.
• International consumers readily recognise the Australian cotton brand which enjoys a
favourable reputation of similar standing to Egyptian Cotton, Supima, French champagne
or Belgian chocolate – elite quality.
• People recognise the long term value of the contribution made by industry to the
community and the benefits that industry provides them in terms of social, emotional and
financial wellbeing.
Tough
• Industry has a capacity for strategic awareness and is responsive to emerging challenges
and opportunities.
• The cotton production sector has developed business and financial management
practices that make it resilient to the impacts of water scarcity. Some larger enterprises
are spreading risk with operations in multiple growing regions while smaller operators have
well established risk management systems, improved financial reserves and improved water
security through new management systems and increased efficiency.
• Production risk is accurately measured and is part of financial institutions requirements for
funding agricultural activities.
• Plant breeding has continued to deliver varieties of high quality and yield adapted to
changing environments.
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• Improved farming systems especially those employing the benefits of a range of
technologies have allowed much higher water use efficiencies to be achieved as well as
increasing the resilience of farming operations to climate volatility.
• The industry continues to invest in improving its productivity and market performance.
Capable
• Industry continues to recognise the importance of people and their capacity to the future
success of the industry.
• Cotton is an attractive industry to be a part of as it is progressive, profitable and ethical.
• The values and achievements of the industry and the resources available brings interest
from new entrants, researchers and environmentalists.
• The cotton industry’s mindset has always been at the forefront of agriculture in terms of
forward thinking and nurturing people. This trait has paid off with cotton being a most
attractive employer in the rural and research sectors, attracting talent from both Australia
and overseas.
• This is reflected in the industry’s adoption of best HR practices and career development
programs including scholarships.
• The industry is renowned for its culture of innovation and responsiveness to change.
8.5
Stakeholder Opinion Survey 2 – Summary
Background
A link to an online survey with 11 questions was forwarded to an identified list of stakeholders
via email as well as being advertised on the Cotton Australia website.
Total survey responses: 52
Breakdown by sectors (please note total numbers below are greater than total responses as
some respondents indicated multiple sectors/occupations):
Cotton producers/farmers: 19
Research: 13
Inputs/suppliers: 9
Consultants: 6
Education: 5
Processing/Classing/Merchants/Distribution: 4
Other: 2
Phone interviews were also conducted with a small number of people (predominantly growers
plus research and service provider). All interviewees had completed the online survey prior to
being interviewed. Additional information and comments from the interviews have been
incorporated within this report.
A similar range of comments and perspectives were raised in the interviews as in the survey
responses. Below is the analysis of the survey responses plus insights from the interviews. A
selection of some of the interesting points raised or different perspectives noticed in the
interview process are provided at the end of this report.
General Observations
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Overall there seems to be a high level of support for the Preferred Future. Most respondents
seem to agree with the broad direction with a focus on differentiation and most of the other key
elements (responsible, tough, successful, respected, capable). The positive nature of the
Preferred Future is also well liked.
Issues raised in the survey and interviews that are worth consideration are the following
observations, assumptions, oversights, and questions:
•
Engagement to ensure ownership of the vision – in particular mentions made of grass
roots growers and R&D (provider) sector
•
Need for strategy, targets and measures – great to have a vision but useless unless
there is action
•
Water – assumption around improved availability, view there is potential benefit to
industry from a leading role in solving national water crisis
•
Cotton as part of farming systems rather than stand alone industry not addressed, “no
farm is a cotton farm alone”.
•
•
•
•
Assumes all cotton produced will be high quality – options needed
•
•
“Seems a bit elitist”
Value added cotton products not addressed
Role in building or being involved in regional communities not adequately addressed
“I have a testing question, will the vision that is presented encourage capital to be
committed to the industry or will the current flight be maintained?”
“I like cotton clothes but the negative image of the cotton industry is a problem. This
envisions turning it around and letting me wear cotton without guilt”.
From this point there is a need to ensure that the nature of the positive Preferred Future story is
realistic and not based on any weak assumptions.
Summary of Survey Question Responses
Overall Satisfaction – the majority of respondents, 86%, either liked or strongly liked the vision
for the Preferred Future. Only two respondents indicated they disliked the vision while five were
neutral. Many indicated they liked the positive and clear nature of the vision.
Not at all
Slightly dislike
Neutral
Somewhat like
Strongly like
1
1
5
22
23
1.92%
1.92%
9.62%
42.31%
44.23%
Likes – there were a wide variety of comments as to what people most liked, with many relating
to the positive benefit of having a vision to focus the industry that is realistic and achievable.
Common mentions were:
•
•
•
•
•
•
•
Positive, optimism
Differentiation
Realistic, achievable, stretch
Goals, forward, vision
Comprehensive, clear, easy to understand
Integration, whole of industry
Responsible, respected
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Dislikes – there were a wide variety of comments on dislikes while a few (5) indicated there
was nothing they didn’t like.
A few dislikes worth mentioning include:
•
•
•
•
•
•
•
•
Over confident, optimistic
On-shoring
Justification for the present
Ignores that not all production will be high quality
ignores practical reality that there will be less water
ignores that resources and people are disappearing
no mention of engaging regional communities
underestimates change of culture required
What’s Missing – there were a wide variety of comments on missing elements while quite a
few respondents felt there was nothing missing (15).
A few missing elements worth mentioning include:
•
•
•
•
•
•
•
Need for the ‘How’ - strategy, targets, measures
•
•
•
•
•
•
•
Resource limitations/water impact on reliability and contribution of this to reputation
Need for a concise, clear vision statement
Farming systems perspective, cotton as part of diverse cropping systems
Future of dryland cotton
Additional cotton products eg. Seed, oil etc
Responsible use of pesticides not covered
Missing ‘Innovative’ aspect, vision is more conservative and lacks a little excitement
factor
Not all cotton produced will be high quality, other markets required
Industry unity
Energy use
Role in rural communities
Strengthen references to BMP and role of R&D
One alternative perspective of a preference to address the vision more as an irrigation
industry as opposed to cotton industry
Believable – the majority of respondents, 65%, thought the Preferred Future was moderately or
very believable. A number of those that thought it was very believable commented that there
were existing initiatives addressing the vision. Those that thought the Preferred Future was not
at all or only slightly believable cited lack of resources, government policy, community/media
awareness, lack of interest and involvement from growers, and unforeseen future hurdles as
reasons. These are all potentially actionable issues so the lack of credibility that some see in
the Preferred Future may potentially be remedied with the development of strategy.
Not at all
Slightly
Moderately
Very
Extremely
2
9
16
18
7
3.85%
17.31%
30.77%
34.62%
13.46%
Interesting comments made were:
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•
“I think we have tied ourselves to what we have now. Sell it to me, convince me to
invest. Ask what others outside the cotton industry think, are they excited?”
•
“Synthetics are improving all the time, by 2029 "smart fibres" will make cotton look
"old". To counter this the industry must start repositioning cotton now in the minds of
the consumer as "the Natural" fibre that synthetics can only mimic by using chemicals”.
•
“The best way to predict the future is to invent it. By stating what our vision is we will be
on the track to delivering it”.
Ambitious – the majority of respondents, 63%, thought the Preferred Future was moderately or
very ambitious while a significant number, 23% also thought it was not at all ambitious (no clear
pattern was evident as to why they thought this). The variation in responses probably indicates
that the level of ambitiousness is about right for a vision with a degree of stretch and
achievability.
Not at all
Slightly
Moderately
Very
Extremely
12
5
19
14
2
23.08%
9.62%
36.54%
26.92%
3.85%
Changes – a wide variety of comments were made in relation to changes. Some of these
related to style/layout or specific wording of the document while others made specific mention
of different elements of the Preferred Future (see full survey responses for examples). The
need for strategy and targets was mentioned a number of times.
Interesting question raised:
•
“What would it take for someone with unlimited capital to invest, why would they do it?”
Level of Support – the majority of respondents, 82%, either mostly or strongly agree that they
support the vision being used by industry organisations to align thinking about the future. Many
positive comments were made about the need for alignment of the industry and having a focus
and direction.
Strongly disagree
Mostly disagree
Undecided
Mostly agree
strongly agree
3
1
5
19
24
5.77%
1.92%
9.62%
36.54%
46.15%
Other Comments – a range of interesting comments were made – see full survey analysis
section for details.
Vision – despite responses to this question being optional, a very high number of people (38
out of 52) chose to respond to this question indicating a good level of enthusiasm and interest.
Suggestions for a vision statement were extremely varied with a range of these focusing on
best production while others focused on consumer choice.
Common vision themes are represented in the word clouds below (a word cloud simply
represents frequency that words are mentioned – the larger the size of the word the more
frequently it was mentioned). The first word cloud contains is unedited while the second cloud
has been edited to remove the most frequently mentioned words so as to see underlying
themes better.
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36
Cloud 1: All words retained, no editing
Cloud 2: Words removed: Australian, Australia, Australia’s, cotton, Cotton, industry, phrase
Emergent Futures – Cotton Industry Vision 2029, Final Report
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